BUENOS AIRES, Argentina (AP) \u2014 Argentines are so used to the corruption in their political system that even Peronists \u2014 supporters of the populist movement that dominated Argentina\u2019s politics for decades \u2014 employ a fatalistic maxim to describe their politicians: \u201cRoban, pero hacen,\u201d or, \u201cThey steal, but they get it done.\u201d<\/p>\n
But for the past two weeks, Argentines have been riveted by a ballooning graft scandal<\/a> drawing in close associates of libertarian President Javier Milei<\/a>, the wild-haired economist who won Argentina\u2019s 2023 election<\/a> in part by campaigning as an outsider against the corrupt, Peronist-dominated elite<\/a> \u2014 \u201cthe caste,\u201d he calls it \u2014 whose unbridled spending helped precipitate Argentina\u2019s economic crisis<\/a>.<\/p>\n At a time of extreme fiscal austerity<\/a>, the allegations that his powerful sister<\/a> and secretary general of the presidency, Karina Milei, profited from a bribery scheme in Argentina\u2019s disability agency have exploded onto the headlines here, threatening to sully the government\u2019s reputation ahead of national midterms at the end of October. Milei denies the claims. <\/p>\n \u201cIt appears to be very similar to many other corruption scandals in Argentina, and taints his image as being completely different, of not being part of \u2018the caste,\u2019\u201d said Eugenia Mitchelstein, the chair of the social sciences department at Buenos Aires\u2019 San Andr\u00e9s University.<\/p>\n Leaked audio reveals explosive allegations <\/p>\n The scandal broke out last month when local streaming channel Carnaval published secretly recorded audio clips purporting to show Diego Spagnuolo, then-director of the National Disability Agency, describe a scheme of kickbacks from drug distributor Suizo Argentina.<\/p>\n The alleged voice of Spagnuolo claims that top officials \u2014 including Milei\u2019s sister Karina and her senior aide, Eduardo \u201cLule\u201d Menem \u2014 accepted bribes of $500,000 and $800,000 in exchange for government pharmaceutical contracts. The voice says Karina Milei takes kickbacks of 3-4% of the contract price.<\/p>\n \u201cI told him, \u2018Javier, you know they\u2019re stealing, that your sister is stealing,\u2019\u201d the alleged Spagnuolo can be heard saying.<\/p>\n It\u2019s not clear who captured the audio or when. Based on references to political events in the recordings, local media have reported that the conversations occurred over several months starting in August 2024.<\/p>\n The leak appeared timed to have maximum impact, rocking Milei\u2019s government before Sunday\u2019s provincial elections in Buenos Aires, the country\u2019s most populous province and a historic Peronist opposition stronghold.<\/p>\n The audio also surfaced soon after Milei vetoed an increase in benefits<\/a> for people with disabilities, arguing it would jeopardize his much-vaunted fiscal surplus<\/a>.<\/p>\n \u201cCorruption scandals at times of economic scarcity tend to have a bigger impact,\u201d said Ana Iparraguirre, an Argentine political analyst and partner at Washington-based strategy firm GBAO. \u201cIt\u2019s hitting hard at Milei\u2019s potential to grow beyond his base.\u201d<\/p>\n The government scrambles for a response <\/p>\n The typically voluble Milei kept silent about the recordings for six days after their release. <\/p>\n Within hours of the leak, he sacked Spagnuolo, who was also his personal lawyer. A federal judge ordered raids at offices and homes belonging to Spagnuolo and Suizo Argentina executives.<\/p>\n Under pressure, Milei\u2019s officials contested the veracity of the recordings and accused the political opposition of orchestrating the scandal to undermine the government\u2019s electoral prospects. <\/p>\n Peppered with questions at a campaign caravan last Wednesday, Milei snapped, telling a reporter, \u201cEverything (Spagnuolo) says is a lie.\u201d The rally devolved into chaos<\/a> as protesters threw stones at his motorcade. <\/p>\n The next day Mieli offered a full-throated defense<\/a> of his sister, condemning all the allegations as political theater.<\/p>\n Recordings surface of Karina Milei in her private office <\/p>\n Just as Milei seemed to reclaim control of the narrative, recordings emerged of Karina Milei speaking to officials inside her private office at the Casa Rosada presidential palace. <\/p>\n The same journalist at Carnaval who released the Spagnuolo recordings published two brief and innocuous audio clips \u2014 one in which Karina Milei can be heard urging colleagues to \u201cstay united\u201d and another in which she complains of working from 8 a.m. until 11 p.m. each day. <\/p>\n The journalist, Mauro Federico, claimed he had 50 minutes of recordings that he was prepared to release, prompting full-fledged panic in the presidency. <\/p>\n Manuel Adorni, Milei\u2019s spokesperson, said the conversations were \u201cillegally recorded\u201d and denounced the leak as \u201can illegal intelligence operation intended to destabilize the country.\u201d <\/p>\n Police raided Carnaval offices and the homes of several journalists, including Federico\u2019s, seizing laptops, cellphones and hard drives. A federal judge barred media outlets from publishing any recordings made inside Casa Rosada in response to a criminal complaint by the Ministry of Security. <\/p>\n Press freedom groups were up in arms, with Paris-based watchdog Reporters Without Borders calling the court order \u201cone of the most serious threats to press freedom in the country since the return of democracy.\u201d<\/p>\n The leak even briefly spiraled into a diplomatic incident after the government in its complaint suggested the possible involvement of Russian spies, citing past instances of Russian expatriates in Argentina<\/a> \u201cconducting actions to influence the population for Russia\u2019s geopolitical interests.\u201d<\/p>\n The Russian Embassy was not pleased. \u201cThe desire to see \u2018Russian spies\u2019 around every corner is irrational and destructive,\u201d it said.<\/p>\n \u2018The boss\u2019 in the limelight<\/p>\n Analysts say a key factor limiting Milei\u2019s ability to quash the scandal is the involvement of Karina Milei, his sister and close confidant since childhood who now acts as his gatekeeper. The president has compared her to Moses and regularly refers to her as \u201cEl Jefe,\u201d the Spanish masculine form for \u201cthe boss.\u201d <\/p>\n A former Instagram cake-baker and tarot card reader, Karina Milei successfully managed her unmarried brother\u2019s presidential campaign before becoming general secretary \u2014 a catch-all title under which she controls the president\u2019s agenda, chooses staff for top government roles and runs his libertarian political party. <\/p>\n It\u2019s not the first time that she has been mired in scandal. Milei\u2019s reputation took a hit<\/a> earlier this year after he promoted a memecoin called Libra<\/a> that crashed hours later, saddling investors with over $250 million in losses. <\/p>\n The coin\u2019s creator bragged in text messages that he was paying Karina Milei to advance his crypto-ambitions. Milei and his sister have denied any wrongdoing. Class-action lawsuits filed by investors are crawling through U.S. courts.<\/p>\n